TYRATECH, INC. • ANNUAL REPORT 2011 • PAGE 39
Year ending December 31,
2012 $68,515
2013 103,242
2014 105,784
2015 142,560
Thereafter $840,004
(7) RELATED PARTY TRANSACTIONS
Research and Development Services from Vanderbilt
University
During the year ended December 31, 2011, the Company
paid US$0 (2010: US$360,000) to Vanderbilt University (Vanderbilt),
a shareholder, for the dedicated use of a laboratory and
staff which houses the Company's proprietary development
platform. Such amounts are included in research and technical
development costs in the consolidated statements of
operations. As of December 31, 2011 and 2010, no amounts
were payable to Vanderbilt under this arrangement.
During the year ended December 31, 2011, the Company
utilized Nottingham Spirk (NS) for product development services.
A member of the Company's Board of Directors also
served as a director for NS. During the year ended December
31, 2011 the Company paid NS US$285,053.
(8) WARRANTS
XLTech Group, Inc. Warrants - These warrants were for a term
of 5 years and expired unexercised on May 1, 2011. At the
date of grant, the warrants were recorded at fair value as a
warrant liability and as a discount in obtaining financing. The
fair value of the warrant at the grant was US$1.9 million.
IPO Underwriter Warrants - In connection with the Initial Public
Offering (IPO) in June 2007, the Company granted warrants
to underwriters of the IPO to purchase 198,002 common
shares of the Company at £5 per common share. The warrants
were for a term of 4 years and expired unexercised on
June 1, 2011. The warrant was remeasured at fair value at
each reporting date with subsequent changes in fair value
recorded in the accompanying consolidated statement of
operations in Interest/Other Expense of $6 (2010:US$0).
(9) STOCK BASED COMPENSATION
(a) Unit Grants
From inception until recapitalized from a limited liability
company to a corporation on May 23, 2007, the Company
has granted a total of 2,000,000 net member units to various
employees through unit grant agreements. These unit
grants were exchanged for common stock at the IPO. The
unit grants generally vest over four years of continual service
and have an initial cost per unit of $0.01. The fair value of
these grants was determined by the Company at the grant
date and was equal to the fair market value of the units at
the date of grant. The fair value is amortized to compensation
expense on a straight-line basis over the vesting period.
The unrecognized future compensation cost is US$0 (2010:
US$32,832).
Employees
As of December 31, 2011 the total unrecognized compensation
cost for these unit grants was US$0 (2010: US$31,857).
The compensation recognized in operating expenses for unit
grants for the year ended December 31, 2011 was US$23,752
(2010: US$0.3 million). Since inception to December 31, 2011,
1,458,629 units granted have vested. The initial cost of the unit
grants to the employees was forgiven by the Company and
was treated as additional compensation to the employee.
The weighted average grant date fair value for all unit grants
during the year ended December 31, 2011 was US$0 million
(2010: US$0 million), as the Company has not issued restricted
stock since 2007.
